Supreme Court Rejects Application of the Discovery Rule to Penalty Actions Brought under 28 U.S.C. 2462
Download PDF
- On February 27, 2013, the U.S. Supreme Court unanimously held that for civil penalty actions brought by the government, the five-year statute of limitations set forth in 28 U.S.C. § 2462 begins to run when the alleged fraud occurs and not, as the Securities and Exchange Commission (“SEC”) had argued, when the fraud is discovered.
- The Gabelli decision is significant not only for providing much needed clarity on when a claim accrues for purposes of § 2462, but because it impacts a wide array of government penalty actions well beyond the securities area.